YOU’RE LOOKING FOR START-UP FINANCING!
BUSINESS LOANS FOR SMALL BUSINESS STARTUPS
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Start up capital financing in Canada often presents a combination of challenge and mystery when it comes to financing business loans in the early stages of a new business. Are you pleading innocent on that subject? That doesn't need to be the case. Let's dig in.
ALL BUSINESSES NEED FINANCING
Very few businesses in Canada can be started without business loan financing of some sort. The wrong amount of capital is one of the major causes of business failure, especially when those sales don't materialize that were part of your revenue forecast and high growth potential plans.
WHAT AMOUNT OF FUNDS DOES YOUR VENTURE NEED?
So what is the exact amount of money needed to ensure the business will have a legitimate chance to flourish? In financial terms, you want to be able to both identify (and then reach) your 'BREAKEVEN POINT’, which, simply speaking is the point where you're covering your expenses and profits are in sight.
UNDERSTAND PROFITS AND CASH FLOW
By the way, we'll forgo talking too much about cash flow today, but we'll just point out that revenues and profits don't equal cash flow, but that's a subject for another day when it comes to borrowers and accessing a business loan.
WHAT ARE 5 KEY CONSIDERATIONS IN STARTUP CAPITAL NEEDS?
So, back to our quest for capital. Some key considerations for the owner/entrepreneur include:
1.What does the business plan identify as the need for opening capital on the balance sheet as well as ongoing working capital and line of credit needs?
2.What amount of financing will come from you, the owner?
3.What assets are required- How will they be acquired (i.e. cash, financing, leasing?)
4.Are their possible partners in the venture, silent or otherwise?
5. Will the owner’s personal credit history and credit score impair the ability to get all the financing they need - Make sure that personal credit score is in the 650 range which is often a standard requirement - Checking your score in advance is the best way of validating that number for good credit -The hard reality is such that a minimum of two years of financials are often required for bank financing of any sort.
CONSIDERING A PARTNER?
One issue that will quickly come up if the entrepreneur is considering a partner, silent or otherwise, is the fact that giving up a lot of ownership in the business in such an early stage is a costly idea - and that assumes you've got a partner you like and can work with!
BALANCING DEBT AND EQUITY
Proper debt financing for small businesses, structured with finance that makes sense is a solid solution to maintaining your ownership equity and realizing future returns on your initial investment based on the growth and success of the business
AVOIDING THE WRONG TYPES OF FUNDING IN YOUR SEARCH
Also, raising money from outside investors has a lot of potential legal obligations to it, many of which aren't often properly considered by the budding entrepreneur. At 7 Park Avenue Financial many clients tell us they have gone the angel investors / venture capital route which they quickly found was frustrating and unsuccessful.
Personal savings are a touchy subject when it comes to financing your business. Most business owners are reluctant to put up savings and their homes. We also caution clients to not mix their personal and business credit lives to the extent they can -
SOURCES OF CAPITAL FOR STARTUPS
So what exactly are the sources of capital for start ups in Canada?
They include:
Lease financing, which is available for start ups by the way
Government business loans - The SBL/CSBF loan can provide up to $1,000,000.00 of business capital to acquire assets, leaseholds, technology, etc.. - Key benefits = low personal guarantee, not outside collateral required, a solid interest rate and terms, early pre-payment privileges, etc- Bar none it is the best loan for startup, small and medium sized businesses in Canada.
Receivable financing
Monetizing your SR&ED tax credits if you’re using this program
Cash term loans from the government crown corporation bank
Bank loans from Canadian chartered banks
In exploring all those options you should know the lender/lenders will focus on your experience, the cash flow forecast, and your personal credit history
IS A BUSINESS PLAN REQUIRED? SPOILER ALERT - YES!
Business plans are a must-have requirement for most startups, including franchise financing efforts. 7 Park Avenue Financial business plans and cash flow projections meet and exceed the requirements of banks and commercial lenders for short term and long term funding needs.
CONCLUSION
Don’t plead innocent on start-up capital financing alternatives in Canada, and accept that venture capitalists and that angel investor are not the proper route for 99.99% of entrepreneurs seeking startup finance. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with business loans and asset monetization that makes sense for your startup success and business needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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